Assailed and sought to be set aside in this Petition for Review under Rule 45 of the Rules of Court is the decision2 dated February 12, 1998 of the Court of Appeals (CA) in CA-G.R. CV No. 50298 affirming an earlier decision of the Regional Trial Court (RTC) of Quezon City in Civil Case No. 89-3899, entitled "Petition for Amendment of Plan and Technical Description of Original Certificate of Title No. 0-28 in the name of Benjamin Guerrero, Registry of Deeds of Quezon City."

The assailed decision of the CA recites the facts as follows:

Sometime in December 1964, respondent Benjamin Guerrero filed with the Bureau of Lands (now Lands Management Bureau) a Miscellaneous Sales Application No. V-83191 covering a parcel of land situated at Pugad Lawin, Quezon City, consisting of 256 square meters. Upon favorable report and recommendation of the District Land Officer, Guerrero's application was approved per Order of Award (Exhibit "B"), with the boundaries of the land awarded specified as follows: N-Lot No. 10-C, Psd-37801; S-Culiat Creek; E-Road; and W-Public Land. A sketch of the land awarded is contained at the back of the Order of Award.

Subsequently, Miscellaneous Sales Patent No. 8991 dated August 16, 1982 was issued in favor of respondent. Pursuant thereto the corresponding Original Certificate of Title No. 0-28 was issued on August 27, 1982.

On July 29, 1983, one Angelina Bustamante filed a protest with the Bureau of Lands claiming that respondent obtained the sales patent through fraud, false statement of facts and/or omission of material facts considering that 174 square meters awarded to respondent covered the land where her house is situated and where she has been residing since 1961.

A formal investigation was conducted by the Bureau of Lands, after which the Director of Lands issued an order dismissing the protest of Angelina Z. Bustamante. The dismissal of the protest was affirmed by the then Minister of Natural Resources and by the Office of the President in a Decision dated July 22, 1985.

Bustamante filed a motion for reconsideration of the Decision dated July 22, 1985. Acting on the motion for reconsideration, the President, ', ordered that the case be remanded to the DENR [Department of Environment and Natural Resources] for the latter's office to conduct an ocular investigation and resurvey of the disputed area. The said directive is contained in the Order dated October 30, 1987(Exhibit "J").

Pursuant to the order of the Office of the President, an ocular investigation and relocation survey was conducted by the DENR. A report (Exhibit "K") was thereafter submitted with a finding that 83 square meters of the titled property of Guerrero consisting of 174 square meters is under ACTUAL PHYSICAL POSSESSION of Marcelo Bustamante (husband of Angelina Bustamante) with only 91 square meters under the physical possession of Guerrero. It was also found out that OCT No. 0-28 is supposed to be traversed by a road 3 meters wide, as even the Order of Award in favor of Guerrero, shows by the boundaries of the land indicated therein, viz: bounded on the N-Lot No. 10-C, Psd-37801, S-Culiat Creek, E-Road and W-Public Land.

On January 10, 1989, the Office of the President, upon receipt of the [DENR] Ocular Investigation and Relocation Survey Report (Exhibit "K") ', issued an order directing the DENR to implement the - Report for the 'proper correction' of the technical description of the land covered by OCT No. 0-28 issued to respondent.

Pursuant to the directive of the Office of the President, the Director of Lands [on behalf of the Republic of the Philippines] instituted the instant action [Petition for Amendment of Plan and Technical Description of OCT No. 0-28 in the name of Benjamin Guerrero] on November 7, 1989.

On April 6, 1990, the [respondent] Benjamin Guerrero filed a motion to dismiss the petition ', alleging among other things, that the RTC of Quezon City was without jurisdiction over the Director of Lands' petition and that the said petition was defective in form and substance, inasmuch as it failed to name [Guerrero] who holds a certificate of title (OCT No. 0-28) over the properties subject of the petition, as respondent in the action, and that the title sought to be amended was irrevocable and can no longer be questioned.

In its order dated July 8, 1992, the lower court denied the said motion to dismiss for lack of merit. Trial of the petition followed with the Director of Lands, on one hand, and [Guerrero], on the other, presenting their respective evidence and witnesses.3 [Words in bracket added.]

On July 13, 1995, the RTC, on the postulate that petitioner Republic failed to prove its allegation that respondent obtained the sales patent and the certificate of title through fraud and misrepresentation, rendered judgment finding for the latter. The trial court likewise ruled that the original certificate of title (OCT No. 0-28) in the name of respondent acquired the characteristics of indefeasibility after the expiration of one (1) year from the entry of the decree of registration.

Consequently, petitioner interposed an appeal to the CA, which, in a decision dated February 12, 1998, affirmed that of the trial court, rationalizing as follows:

It is a settled rule that a certificate of title issued pursuant to any grant or patent involving public lands is as conclusive and indefeasible as any other certificate of title issued upon private lands in ordinary or cadastral registration proceedings. The effect of registration of a homestead or any other similar patent and the issuance of a certificate of title to the patentee is to vest in him an incontestable title to the land, in the same manner as if ownership had been determined by final decree of the court, and the title so issued is absolutely conclusive and indisputable.

In the same way, therefore, that a decree of registration may be reviewed or reopened within one year after the entry thereof, upon a charge of actual fraud, a patent awarded in accordance with the Public Land Law may be reviewed within one year from the date of the order for the issuance of the patent also on the ground of actual fraud.

x x x x x x x x x

xxx there is no showing - that at the time the [respondent] applied for his miscellaneous sales patent, there were third persons who had been in occupation of the land applied for. While subsequent survey documents, prepared as a consequence of the protest filed by the Bustamentes, report the possession of the Bustamantes of a portion of the land, and the erection of their house thereon, these reports do not indicate if such structures were existing at the time the application of the [respondent] was filed in 1964.

There is no support, therefore, to the submission that the [respondent] was guilty of actual fraud in the acquisition of his miscellaneous sales patent, and subsequently, OCT No. 0-28.4 (Words in bracket added)

Petitioner then moved for a reconsideration of the above decision but the same was denied by the appellate court in its resolution of March 23, 1998.5

I. That a certificate of title issued pursuant to any grant or patent involving public lands is conclusive and indefeasible despite the fact that respondent's title was procured through fraud and misrepresentation.

II. That there is no basis for the submission that respondent was guilty of actual fraud in the acquisition of his miscellaneous sales patent despite the final ruling of the Office of the President from which ruling respondent did not appeal.

III. That the Director of Lands cannot raise the issue of possession of a third person of the land, or a portion thereof, after the award and issuance of the patent to the applicant despite the obvious fact that the protest was filed within one year from the issuance of patent.6

Petitioner argues in esse that respondent procured his sales patent and certificate of title through fraud and misrepresentation. To support its basic posture, petitioner points to the verification survey conducted by Engr. Ernesto Erive of the DENR, which, to petitioner, argues for the proposition that respondent's entitlement to a public land award should have been limited to a 91-square meter area instead of the 174 square meters eventually granted.

On the other hand, respondent contends that his OCT No. 0-28 which he secured pursuant to a sales patent is conclusive and indefeasible under the Torrens system of registration. As such, his title can no longer be altered, impugned or cancelled.

At the outset, it must be pointed out that the essential issue raised in this Petition â€• the presence of fraud â€• is factual. As a general rule, this Court does not review factual matters, as only questions of law may be raised in a Petition for Review on Certiorari filed with this Court. And as the Court has consistently held, factual findings of trial courts, when adopted and confirmed by the CA, are final and conclusive on this Court,7 save when the judgment of the appellate court is based on a misapprehension of facts or factual inferences manifestly incorrect or when that court overlooked certain relevant facts which, if properly considered, would justify a different conclusion.8 Obviously, petitioner is invoking these exceptions toward having the Court review the factual determinations of the CA.

The basic issue in this case turns on whether or not petitioner has proven by clear and convincing evidence that respondent procured Miscellaneous Sales Patent (MSP) No. 8991 and OCT No. 0-28 through fraud and misrepresentation.

It bears to stress that the property in question, while once part of the lands of the public domain and disposed of via a miscellaneous sales arrangement, is now covered by a Torrens certificate. Grants of public land were brought under the operation of the Torrens system by Act No. 496, or the Land Registration Act of 1903. Under the Torrens system of registration, the government is required to issue an official certificate of title to attest to the fact that the person named is the owner of the property described therein, subject to such liens and encumbrances as thereon noted or what the law warrants or reserves.9 As it were, the Torrens system aims to obviate possible conflicts of title by giving the public the right to rely upon the face of the Torrens certificate and to dispense, as a rule, with the necessity of inquiring further; on the part of the registered owner, the system gives him complete peace of mind that he would be secured in his ownership as long as he has not voluntarily disposed of any right over the covered land.10

Section 122 of Act No. 496 provides:

SEC. 122. Whenever public lands - belonging to the Government of the [Republic of the Philippines] are alienated, granted, or conveyed to persons or to public or private corporations, the same shall be brought forthwith under the operation of this Act and shall become registered lands. It shall be the duty of the official issuing the instrument of alienation, grant, or conveyance in behalf of the Government to cause such instrument before its delivery to the grantee, to be filed with the register of deeds for the province where the land lies and to be there registered like other deeds and conveyances, whereupon a certificate shall be entered as in other cases of registered land, and an owner's duplicate certificate issued to the grantee. The deed, grant, or instrument of conveyance from the Government shall not take effect as a conveyance or bind the land, but shall operate only as a contract between the Government and the grantee and as evidence of authority to the clerk or register of deeds to make registration. The act of registration shall be the operative act to convey and affect the land, and in all cases under this Act registration shall be made in the office of the register of deeds for the province where the land lies. xxx. (Words in bracket added)

Upon its registration, the land falls under the operation of Act No. 496 and becomes registered land. Time and again, we have said that a Torrens certificate is evidence of an indefeasible title to property in favor of the person whose name appears thereon.11

However, Section 38 of Act No. 496 recognizes the right of a person deprived of land to institute an action to reopen or revise a decree of registration obtained by actual fraud. Section 38 of Act No. 496 says so:

SEC. 38. â€• xxx. Every decree of registration shall bind the land, and quiet title thereto, subject only to the exceptions stated in the following section. It shall be conclusive upon and against all persons, including the [Republic of the Philippines] and all the branches thereof, '. Such decree shall not be opened by reason of the absence, minority, or other disability of any person affected thereby, nor by any proceeding in any court for reversing judgments or decrees, subject, however, to the right of any person deprived of the land or of any estate or interest therein by decree of registration obtained by actual fraud, to file in the proper Court of First Instance [now Regional Trial Court] a Petition for Review of the decree of registration within one year after entry of the decree provided no innocent purchaser for value has acquired an interest. Upon the expiration of said term of one year, every decree or certificate of title issued in accordance with this section shall be incontrovertible. xxx. (Emphasis and words in bracket supplied)

Fraud is of two kinds: actual or constructive. Actual or positive fraud proceeds from an intentional deception practiced by means of the misrepresentation or concealment of a material fact. Constructive fraud is construed as a fraud because of its detrimental effect upon public interests and public or private confidence, even though the act is not done with an actual design to commit positive fraud or injury upon other persons.12

Fraud may also be either extrinsic or intrinsic. Fraud is regarded as intrinsic where the fraudulent acts pertain to an issue involved in the original action, or where the acts constituting the fraud were or could have been litigated therein. The fraud is extrinsic if it is employed to deprive parties of their day in court and thus prevent them from asserting their right to the property registered in the name of the applicant.13

The distinctions assume significance because only actual and extrinsic fraud had been accepted and is contemplated by the law as a ground to review or reopen a decree of registration. Thus, relief is granted to a party deprived of his interest in land where the fraud consists in a deliberate misrepresentation that the lots are not contested when in fact they are; or in willfully misrepresenting that there are no other claims; or in deliberately failing to notify the party entitled to notice; or in inducing him not to oppose an application; or in misrepresenting about the identity of the lot to the true owner by the applicant causing the former to withdraw his application. In all these examples, the overriding consideration is that the fraudulent scheme of the prevailing litigant prevented a party from having his day in court or from presenting his case. The fraud, therefore, is one that affects and goes into the jurisdiction of the court.14

We have repeatedly held that relief on the ground of fraud will not be granted where the alleged fraud goes into the merits of the case, is intrinsic and not collateral, and has been controverted and decided. Thus, we have underscored the denial of relief where it appears that the fraud consisted in the presentation at the trial of a supposed forged document, or a false and perjured testimony, or in basing the judgment on a fraudulent compromise agreement, or in the alleged fraudulent acts or omissions of the counsel which prevented the petitioner from properly presenting the case.15

Petitioner fails to convince the Court that the facts relied upon by it to justify a review of the decree constitute actual and extrinsic fraud. It has not adduced adequate evidence that would show that respondent employed actual and extrinsic fraud in procuring the patent and the corresponding certificate of title. Petitioner miserably failed to prove that it was prevented from asserting its right over the lot in question and from properly presenting its case by reason of such fraud. In fact, other than its peremptory statement in its petition filed before the trial court that "the patentee, Benjamin Guerrero, obtained the above indicated sales patent through fraud, false statement of facts and/or omission of material facts,"16 petitioner did not specifically allege how fraud was perpetrated by respondent in procuring the sales patent and the certificate of title. Nor was any evidence proffered to substantiate the allegation. Fraud cannot be presumed, and the failure of petitioner to prove it defeats it own cause.

Well-settled is the rule that the party alleging fraud or mistake in a transaction bears the burden of proof.17 The circumstances evidencing fraud are as varied as the people who perpetrate it in each case. It may assume different shapes and forms; it may be committed in as many different ways.18 Thus, the law requires that fraud be established, not just by preponderance of evidence, but by clear and convincing evidence.19

Petitioner relies heavily on the verification survey report20 which stated that respondent Guerrero was entitled to only 91 square meters of the subject lot instead of 174 square meters which was awarded to him. There is, however, no proof that the area eventually awarded to respondent was intentionally and fraudulently increased. It was never proven that respondent was a party to any fraud that led to the award of a bigger area of 174 square meters instead of 91 square meters. Petitioner even failed to give sufficient proof of any error which may have been committed by its agents who had surveyed the subject property nor had petitioner offered a sensible explanation as to the reason for such discrepancy. Thus, the presumption of regularity in the performance of official functions must be respected.

This Court agrees with the RTC that the issuance of the sales patent over the subject lot was made in accordance with the procedure laid down by Commonwealth Act No. 141, as amended, otherwise known as the Public Land Act.21 Under Section 91 thereof, an investigation should be conducted for the purpose of ascertaining the veracity of the material facts set out in the application.22 The law also requires sufficient notice to the municipality and barrio where the land is located in order to give adverse claimants the opportunity to present their claims.23

In the instant case, records reveal that on December 22, 1964, a day after respondent filed his miscellaneous sales application, an actual investigation and site verification of the parcel of land was conducted by Land Investigator Alfonso Tumbocon who reported that the land was free from claims and conflicts.24 Likewise, the notice of sale of the lot in question was posted at the District Land Office in San Miguel, Manila, at the Quezon City Hall, and at Pugad Lawin, Quezon City for 30 consecutive days from February 17, 1965 to March 17, 1965 which was the date scheduled for the sale of the lot. The said notice was worded as follows:

If there is any adverse claim to the land, such claim must be filed at the Bureau of Lands, Manila on or before the date of the sale; otherwise such claim shall forever be barred.25

Further, the "Order of Award" 26 dated May 20, 1971, as well as the "Issuance of Patent"27 dated June 28, 1982 were both duly signed by the Director of Lands. The "Order of Award" even declared that Guerrero has in good faith established his residence on the land in question. On the other hand, the "Issuance of Patent" stated that the land consisting of 174 square meters is free from any adverse claim and that Guerrero has fully paid the purchase price of the lot. Having complied with all the requirements of the law preliminary to the issuance of the patent, respondent was thus issued MSP No. 8991 dated August 16, 1982. Thereafter, the corresponding OCT No. 0-28 was issued on August 27, 1982 in the name of respondent Guerrero.

At any rate, by legal presumption, public officers are deemed to have regularly performed their official duties. Thus, the proceedings for land registration that led to the issuance of MSP No. 8991 and OCT No. 0-28 in respondent's name are presumptively regular and proper. To overturn this legal presumption will not only endanger judicial stability, but also violate the underlying principle of the Torrens system. Indeed, to do so would reduce the vaunted legal indefeasibility of Torrens titles to meaningless verbiage.28 Besides, this presumption of regularity has not been overcome by the evidence presented by petitioner. We, therefore, cannot sustain petitioner's contention that fraud tainted the sales patent granted to respondent Guerrero, as well as the certificate of title issued in consequence thereof.

Granting that Guerrero committed extrinsic and actual fraud, petitioner failed to avail itself of the remedy within the prescribed period. Under Section 38 of Act No. 496, a petition for reopening and review of the decree of registration must be filed within one year from the date of entry of said decree.

In the case of public land grants or patents, the one-year period commences from the issuance of the patent by the government.29

In the instant case, the sales patent was issued to respondent on August 16, 1982, while petitioner instituted an action to amend respondent's certificate of title on November 7, 1989 or after the lapse of more than seven (7) years from the issuance of the patent. Clearly, petitioner failed to timely avail of the remedy to contest Guerrero's title.

Petitioner argues that the right of the State for the reversion of unlawfully acquired property is not barred by prescription. Thus, it can still recover the land granted to respondent.

True, prescription, basically, does not run against the State and the latter may still bring an action, even after the lapse of one year, for the reversion to the public domain of lands which have been fraudulently granted to private individuals.30 However, this remedy of reversion can only be availed of in cases of fraudulent or unlawful inclusion of the land in patents or certificates of title. In the present case, petitioner cannot successfully invoke this defense for, as discussed earlier, it was never proven that respondent's patent and title were obtained through actual fraud or other illegal means.

Lest it be overlooked, a piece of land covered by a registered patent and the corresponding certificate of title ceases to be part of the public domain. As such, it is considered a private property over which the Director of Lands has neither control nor jurisdiction.31

Petitioner likewise insists that respondent's title had yet to attain the status of indefeasibility. As argued, Angelina Bustamante was able to timely file a protest on July 29, 1983, which was well within the one-year prescriptive period.

We do not agree.

While Angelina Bustamante indeed protested the award of a sales patent in favor of respondent, the protest was, however, filed with the Bureau of Lands instead of with the regional trial court as mandated by the aforequoted provision of Section 38 of Act No. 496. Said provision expressly states that a Petition for Review of a decree of registration shall be filed in the "proper Court of First Instance" (now Regional Trial Court). The law did not say that such petition may be filed with an administrative agency like the Bureau of Lands. To be sure, what the law contemplates in allowing a review of the decree of registration is a full-blown trial before a regular court where each party could be afforded full opportunity to present his/its case and where each of them must establish his case by preponderance of evidence and not by mere substantial evidence, the usual quantum of proof required in administrative proceedings. The concept of "preponderance of evidence" refers to evidence which is of greater weight, or more convincing, than that which is offered in opposition to it; at bottom, it means probability of truth.32 On the other hand, substantial evidence refers to such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds equally reasonable might conceivably opine otherwise.33

As the review of a decree of registration constitutes an attack on the very integrity of land titles and the Torrens system, a full-blown trial on the merits before a regular court is necessary for the purpose of achieving a more in-depth and thorough determination of all issues involved.

Hence, contrary to petitioner's assertion, the protest filed by Bustamante with the Bureau of Lands cannot be considered in the context of a petition to review the decree of registration issued to respondent. It was only on November 7, 1989 that such petition was filed by the Director of Lands with the RTC and obviously, it was way beyond the one-year period prescribed by law.

It is worth stressing that the Torrens system was adopted in this country because it was believed to be the most effective measure to guarantee the integrity of land titles and to protect their indefeasibility once the claim of ownership is established and recognized. If a person purchases a piece of land on the assurance that the seller's title thereto is valid, he should not run the risk of being told later that his acquisition was ineffectual after all. This would not only be unfair to him. What is worse is that if this were permitted, public confidence in the system would be eroded and land transactions would have to be attended by complicated and not necessarily conclusive investigations and proof of ownership. The further consequence would be that land conflicts could be even more abrasive, if not even violent. The government, recognizing the worthy purposes of the Torrens system, should be the first to accept the validity of titles issued thereunder once the conditions laid down by the law are satisfied.34

Instead of stabilizing the Torrens system, petitioner, in filing a suit for the amendment of OCT No. 0-28, derogates the very integrity of the system as it gives the impression to Torrens title holders, like herein respondent, that their titles can be questioned by the same authority who had approved their titles. In that case, no Torrens title holder shall be at peace with the ownership and possession of his land, for land registration officers can question his title any time they make a finding unfavorable to said title holder. This is all the more frustrating for respondent Guerrero considering that he had bought the subject lot from the government itself, the very same party who is now impugning his title.

While the Torrens system is not a mode of acquiring titles to lands but merely a system of registration of titles to lands,35 justice and equity demand that the titleholder should not be made to bear the unfavorable effect of the mistake or negligence of the State's agents, in the absence of proof of his complicity in a fraud or of manifest damage to third persons. The real purpose of the Torrens system is to quiet title to land and put a stop forever to any question as to the legality of the title, except claims that were noted in the certificate at the time of the registration or that may arise subsequent thereto.36 Otherwise, the integrity of the Torrens system shall forever be sullied by the ineptitude and inefficiency of land registration officials, who are ordinarily presumed to have regularly performed their duties.37

Respondent's certificate of title, having been registered under the Torrens system, was thus vested with the garment of indefeasibility.

WHEREFORE, the instant petition is hereby DENIED and the assailed decision is AFFIRMED.

SO ORDERED.

Endnotes:

1 In Petitioner's Motion for Extension of Time to File Petition for Review on Certiorari, the case was entitled, "Petition for Amendment of Plan and Technical Description of Original Certificate of Title No. O-28 in the Name of Benjamin Guerrero, Registry of Deeds of Quezon City, et. al., v. Benjamin Guerrero," Rollo, pp. 2-3.

"SEC 91. The statements made in the application shall be considered as essential conditions and parts of any concession, title, or permit issued on the basis of such application, and any false statement therein or omission of facts altering, changing, or modifying the consideration of the facts set forth in such statements, and any subsequent modification, alteration or change of the material facts set forth in the application shall ipso facto produce the cancellation of the concession, title, or permit granted. It shall be the duty of the Director of Lands, from time to time and whenever he may deem it advisable, to make the necessary investigations for the purpose of ascertaining whether the material facts set out in the application are true, or whether they continue to exist and are maintained and preserved in good faith, and for the purposes of such investigation, the Director of Lands is hereby empowered to issue subpoenas and subpoenas duces tecum and, if necessary, to obtain compulsory process from the courts. xxx."

"SEC. 46. If, after the filing of the application and the investigation, the Director of Lands shall be satisfied with the truth of the allegations contained in the application and the applicant comes with provisions of this chapter, he shall cause a patent to issue to the applicant or his legal successor for the tract so occupied and cultivated, provided its area does not exceed twenty-four hectares; Provided, That no application shall be finally acted upon until notice thereof has been published in the municipality and barrio in which the land is located and adverse claimants have had an opportunity to present their claims."